By Landon Manning
A new test of the possibilities of distributed ledger technology has taken place in France with a multimillion dollar property sale conducted entirely over a blockchain.
As local media reported on June 30, 2019, the AnnA Villa in Paris was sold for 6.5 million euros via a transaction that took place on the blockchain-based Equisafe investment platform. The villa is a mansion and estate built nearly 100 years ago and its transaction was a successfully-performed example for a new model of property deals that could become commonplace in the future.
The use of blockchain technology in this deal was not an incidental gimmick for an otherwise mundane transaction, but instead allowed real estate companies to create tokenized shares of the property’s value. These tokens were then sent to the purchaser in bulk over Equisafe’s blockchain, creating a precedent for larger estates to be easily divided between multiple purchasers in a trustless fashion.
“The difference between a typical transaction and an operation like AnnA is that the ownership rights of the company that owns that building are now fully coded in the blockchain,” Bilal El Alamy, Equisafe’s co-founder, said, per Next-Finance. “Each token is coded to contain the conditions of purchase, sale and exchange of securities, as well as the rights to which it gives access.”
All relevant legal and notarial deeds were also recorded on the company’s blockchain, eliminating many concerns of errors in data entry and administrative error, as well as giving property developers access to a convenient database.
Although this was the first such blockchain property transaction in Europe, Forbes commented in its coverage on the deal that several other firms have conducted experiments with this type of deal worldwide. A $30 million property in Manhattan was tokenized using the Ethereum blockchain in late 2018, for example, and a resort in Colorado conducted a security token offering to net $18 million.
This model of tokenized real estate may allow for greater flexibility in the world of real estate in the near future. Already, a company in Thailand has publicly announced plans to apply this tokenization process on a much larger scale, in addition to the attempts that have already taken place. With a few more such successes, firms like Equisafe could become a more commonplace sight in the world of real estate.